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Katarzyna Adamiec

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The recent global economic crisis in which lots of businesses encountered strong decline in the demand encouraged them to seek new opportunities for improving efficiency while reducing overheads. Shared service centres became one of the ways to achieve long-term saving. 

What is a shared service centre?

A shared service centre is a separate organisational unit which supplies services to internal customers. This way, certain services for decentralised entities are rendered from one central location. The services are performed by a self-reliant unit which is controlled by and belongs to its parent organisation. 

A shared service centre lets an entity reorganise and standardise transaction processes and thus consolidate resources and better use the available technology. 

Such a centre can be organised in a decentralised, centralised or mixed way. Most of the new shared service centres in Poland are centralised because what businesses want to achieve by opening them is mainly the cost reduction by downsizing. Advantages of the centralised solution include better use of funds and resources and the opportunity for constant improvement of the organisation.

Why locate your shared service centre in Poland?

Since the shared service centres are opened for cost saving, they are located in those parts of the world where the quality of resources is the best value for money. Consequently, the location selection process is affected by a number of factors other than costs to ensure that the intended saving is achieved while the quality standards are preserved. In the case of shared service centres, these factors mean competence characteristics of the employees, such as education, innovativeness, willingness to develop, working culture and language skills. Poland performs very well in all these aspects. 

EU grants for investments in shared service centres in Poland

Potential investors pay attention also to the tax consequences of such investments and to opportunities for subsidising the projects. Polish enterprises in 2007–2013 were aided by the Operational Programme "Innovative Economy 2007–2013", run by the Ministry of the Economy, which offered EU grants for investments in shared service centres, mainly those focused on research and development. The Operational Programme to assist the businesses between 2014 and 2020 will be called "Smart Growth". It is expected that through these EU grants the companies will be reimbursed for a part or all of the expenses incurred on tangible and intangible assets or on creation of jobs. In principle, the programme is meant to support investments with high innovative potential and big value added which create a significant number of jobs. A shared service centre falls under the rubric of this concept.

Special Economic Zones (SEZs) in Poland – the location for a shared service centre

The benefits, in the form of a tax relief, from investing in the special economic zones in Poland (SEZs) are also worthy of your attention. There are currently 14 such zones in Poland. The tax relief is offered to investors who have obtained a permit to conduct a business in a SEZ. The permit stipulates the minimum level of investment and manpower as well as the maximum level of state aid and the scope of activities that may be pursued. In this model the state aid is extended over time and goes to the enterprise in the form of a tax relief from 25 to 70 per cent of the net investment value or the total of 2-year labour costs incurred in connection with the investment, updated to the current value. Noteworthy, the Council of Ministers decided in 2013 to extend the existence of the SEZs until 2026. 

What are the prospects for development of shared service centres in Poland?

The above-mentioned advantages encourage multinational corporations to locate their shared service centres in Poland. More and more investors begin to look at Poland not only as a whole but they also focus on individual regions. The major cities in Poland are now home to dozens of shared service centres. At the same time, in addition to the major cities, investors become more and more interested in the emerging localities such as Bydgoszcz, Lublin, Radom or Szczecin. The map of Poland even shows that certain cities specialise in certain services. Wroclaw, which is home to the biggest number of research and development centres and is the leader in modern services, has a technological park with nearly 50 IT firms, while Warsaw, Cracow and Gdansk host financial and accounting service centres. Still, the most of them can be found in Poznan. If the trend continues at the unchanged pace, the city may soon turn into one of the most important financial centres of the Central and Eastern Europe.

If this subject has caught your interest or you have any questions about the European grants, state aid or investment advice in Poland, please contact our consultants in the offices in Cracow, Gdansk, Gliwice, Poznan, Warsaw and Wroclaw.